Property valuations vs agent's appraisals: how are they different?

When you're buying a property, the real estate sales agent will provide you with a price guide to help you get a sense of what the property may sell for. As a buyer, what steps can you take to be certain that the price you may end up paying is a fair price for that particular property?

One way would be to get an agent's appraisal of the property. Both selling agents and buyer's agents are able to provide property appraisals. However, if you want a very accurate and precise figure, a formal property valuation is required.

Typically, a buyer's agent’s appraisal provides an indication of the property's value based on opinion. This opinion is formed by many measures, such as rental return, comparable sales of similar properties in the same area over the past 6 months and so on.

A property valuation, on the other hand, is carried out by an independent and qualified professional valuer with tertiary qualifications in property. They provide an exact $ value, rather than an estimated range. For example, a buyer's agent's appraisal may place the property at $610,000 - $650,000, whereas a valuer will say that the property is worth exactly $635,000.

A valuer's valuation may be used in court proceedings, by banks, and by other Statutory Bodies.